Combating Pandemic Paralysis
Kevin Harrington, A Shark Tank Original Investor on the Most Effective Ways to Turn a Crisis into Cash Flow
Last year, nearly 30 million people were out of work due to the COVID-19 pandemic and several thousand brick and mortar businesses closed their doors. Many Americans found themselves in unpredictable situations and needed advice and inspiration to continue actively pursuing their goals.
Alongside our daughter, Jayla, an aspiring entrepreneur, Steve and I sat down with our good friend and fellow business extraordinaire, Kevin Harrington. You may recognize Kevin as an original Shark on the incredibly successful business reality show Shark Tank, but he is also creator of the infomercial, key contributor to launching the As Seen on TV brand, worldwide speaker, and investor in his own right. Kevin is a savvy businessman with nearly four decades of experience helping entrepreneurs develop and expand their inventions. He has launched over 700 products and built numerous companies.
During our interview, Kevin spoke about the importance of multiple sources of income, capitalizing on the indefinite downtime, and his new book, Mentor to Millions: Secrets of Success in Business, Relationships, and Beyond.
PASHA: Being one of the pioneers and one of the first on Shark Tank, what was that like and how do you think the show has evolved?
KEVIN: I’ve been shooting television infomercials for 38 years, so it’s not like when I got to Shark Tank, I wasn’t familiar with the camera or the process—but I shot low budget infomercials. Now on Shark Tank, I showed up on set, and it was on a Sony movie lot. We were in a 50,000 sq ft studio with 60-foot ceilings, 16 cameras, and a million-dollar set. I’m like, ‘Wow! I’ve never spent a million dollars on an entire infomercial, let alone a million dollars on building an entire set.’ This was first class. The show was going to be on ABC Network; this was prime time network television, as good as it gets. It was pretty cool to be a part of that.
As with any job, there are aspects employees don’t like or would rather not do. I recalled feeling apathetic and indifferent about some products during the first few seasons of Shark Tank. However, at the end of the day, we were conscious that the show is a television production that depends on public interest.
PASHA: Tell us more about your Shark Tank days, and the successes you’ve had because of the show.
KEVIN: There was one downside in the earlier years of Shark Tank, and that is the quality of the deals and the pitches were not as good as I would have liked. I’m an entrepreneur and would go to trade shows and take pictures, and I saw exciting enough products. I’ve invested in over 700 deals over a number of years. When I got to Shark Tank, I was like ‘Wait a minute, where’s the good stuff?’ I was taken aback during Seasons One and Two—they didn’t have a lot of really good stuff. I actually had to invest in things that I didn’t necessarily think we’re going to be the biggest winners.
One day we were filming and did seven segments and nobody, not one Shark, had made a deal. Mark Burnett [the executive producer] said, ‘Hey guys if you don’t invest, we’re not going to have a good TV show, and we’re not going to get good ratings. Start putting your money up.’ We were like, ‘Mark, which one of those deals would you actually put your own money into? Let’s see some good stuff.’ The next segment, we had a big contest between us, and we ended up investing, but not necessarily because we wanted to, but we had to.
The reality is, there are some products that have had amazing successes. However, some great ideas may not be marketable or unique enough to appeal to consumers. I have mastered the balancing act of sifting through the outlandish, mundane, and just plain awful product ideas to discover potential goldmines. I’ve done tens of millions of dollars with the products I’ve invested in on Shark Tank. One of the projects that have been wildly successful is Scrub Daddy. Laurie Grenier had that product originally. Now, I have a really powerful Amazon business, so I ended up with the rights for Scrub Daddy for Amazon.
Being a Shark was really cool because we were in a great publicity machine that has helped build our brands. When I go around the country speaking at different events, it’s a global brand. It’s the number one business reality show in the history of television. They are in Season 11 now and will be filming Season 12 soon.
PASHA: The last deal you called me about seemed good, but I was unsure. It turned out to be a hot commodity last year. Do you remember what that was?
KEVIN: Was it the toilet paper project? I told you to jump into toilet paper. You never know why things come around. I saw Dollar Shave Club take off; Michael Dubin sold it for $1 Billion. A young guy came to me and said, ‘I want to do the same thing they did for razors for toilet paper,’ and it was a great concept—just a little too early for its time. Now look what has happened in the market. Any roll of toilet paper you can get your hands on, you can make money on. It’s gold.
STEVE: What do you suggest to the everyday, average person who now understands that life forces you to pivot?
KEVIN: I’m a big believer in things happening for a reason and I believe this is a reset for a lot of people. Exactly what we’re doing right now, talking to experts and mentors. People should be checking their lives and asking, ‘Who is my mentor?’ Everyone should be reaching out to their mentors if they have one. If they don’t, now is the time to get one.
Tough times often provide learning opportunities that help prevent similar mistakes from happening in the future. I experienced business catastrophe several years ago, and because I nearly lost everything, I decided to operate my multimillion-dollar company more efficiently.
PASHA: Tell us more about that crisis and how it caused you to pivot.
KEVIN: Thirty years ago, I had a major crisis in my business that happened because of the Gulf War. I had hundreds of employees and overnight my business went down 90%. I was doing 100 million dollars a year in sales, and suddenly it went to almost zero. We were in a turmoil like I’d never seen before. What we went through at that time prepared me for this season. I had buildings, overhead costs, 500 employees, a production studio, a warehouse full of inventory—I had all this stuff and had to sell a bunch of assets. We came out of it okay, eventually; but I said, ‘When the next one hits, I’m going to be ready.’ Consequently, I don’t have tons of overhead and 500 employees. I have less than a dozen total people running my multimillion-dollar business. I contract out everything to keep my overhead costs low.
When I came out of that Gulf War crisis in 1990, I released my first book, The 100 Best Spare-Time Business Opportunities Today. People were asking, ‘How do I get other income?’ I’ve been saying to people for 30 years, don’t rely on one income stream. You need to have extra income streams in your life. I have 25 income streams in my life now because when I had one and it stopped, I almost didn’t survive it.
PASHA: Because of the COVID-19 pandemic, many households and businesses are struggling right now. People need tips on how they can learn from this unfortunate event and improve their circumstances going forward.
KEVIN: There are a couple things people should be doing:
1. Tune in to all kinds of information. Podcasts, webinars, etc. I’ve been doing two or three a day and I’ve been attending them as well. I’ve been listening to some pretty powerful people because I want to make sure I’m in tune with what everyone is doing.
People should be looking at their personal finances. Maybe get a line of credit if they can. If they own homes, talk to their bankers to get lower interest rates.
Just recently, the interest rate on one of my loans dropped by two points. I asked my wife to go through our credit card statements, and she found 15 different auto bills, and she didn’t even know what they were. Twenty dollars for this and that adds up to three or four hundred a month. In a year, that’s almost five grand and you don’t even know what you’re getting for it. Now is the time to cleanse financial misdeeds, mistakes, and overpayments—renegotiate. It’s important.
2. Overhaul your website. Maybe you built a website several years ago. If your website doesn’t target a group of potential customers, now is the time to do it. Get all of your digital things figured out. The world is moving in that direction, and it is forcing a lot of companies to explore digital relationships. If someone goes to your website and it’s not optimized for mobile, they’re going to leave your site. They don’t want to do business with people who can’t give a good web experience.
3. Databases are valuable assets in a company. Start understanding what assets you have and assemble them. Communicate with people and start creating content on a regular basis. Use the time to connect and make new relationships. I’m hearing from some people who I haven’t heard from in years. They’re connecting with me and now we’re starting new conversations. Check your phone and email lists to see who you can connect with.